Chernobyl projects make progress

04 November 2014

Construction of the central used fuel storage facility (CSFSF) has started at the Chernobyl nuclear power plant.

Meanwhile, governors of the European Bank for Reconstruction and Development (EBRD) will take a decision on a proposal for additional bank contributions for the completion of the Chernobyl New Safe Confinement (NSC) on the site of the 1986 nuclear accident.

The CSFSF will be a dry storage facility in which the used fuel will be stored in double-walled stainless steel canisters. These are themselves loaded within protective concrete modular systems designed to provide physical protection, radiation shielding and passive heat removal. A ceremony was held on 26 August to mark the start of construction of the facility, which is being built near resettled villages in the Chernobyl Exclusion Zone.

Energoatom, the country's nuclear power plant operator, selected US company Holtec International in 2005 for the turnkey supply of the facility. But delays to approval of a national law on management of used nuclear fuel - that was finally adopted in 2012 - and to allocation of a site for the new facility meant the contract was not implemented. A revised contract was signed in June.

State Specialised Enterprise Chernobyl NPP said on 29 October that Holtec will act as the general contractor of the project, while two Ukrainian companies, YUTEM Engineering Ltd and Ukrtransbud Inc, will build the storage facility. Once official approvals have been received, large-scale work on construction of the facility will restart this month. Existing equipment will be inspected and tested by the end of this year.

The facility will initially serve nine of the country's 15 reactors - seven VVER-1000s and two VVER-440s located at Rivne, South Ukraine and Khmelnitsky. The Zaporozhe nuclear power plant operates its own on-site used fuel storage facility that was commissioned in 2001.

The CSFSF is located between the resettled villages of Stara Krasnytsya, Buryakivka, Chystohalivka and Stechanka, southeast of the Chernobyl nuclear power plant, within the Exclusion Zone.

Lending

The last cubic metre of concrete needed for the foundation of the NSC was poured in August. When completed, the NSC will prevent the release of contaminated material from the present shelter and at the same time protect the structure from external impacts such as extreme weather.

In a statement yesterday, the EBRD said the project in Chernobyl has a funding shortfall of €615 million ($772 million). To fill this gap the proposal provides for an additional contribution of €350 million ($439 million) by the EBRD in anticipation of a €165 million ($207 million) contribution by the G7/European Commission and the balance of €100 million ($126 million) by non-G7 donors.

"The G7 leads the effort to mobilize the additional funds and will organize a pledging event in the spring of 2015," the EBRD said. "Should pledging efforts fall short of the amount allocated to non-G7 donors, the EBRD would step in."

The NSC will make the old Chernobyl shelter and remnants of the damaged reactor safe and environmentally secure, it said. Equipped with automated cranes it will create the conditions for the dismantling of the hastily built old structure and for nuclear waste management operations for the duration of its design life of 100 years.

Completion of the project is scheduled for end-2017. The total cost of the EBRD's Shelter Implementation Plan, of which the NSC is the most prominent element, is estimated in the range of €2.15 billion ($3.13 billion). Of this, the New Safe Confinement will cost about €1.5 billion ($1.89 billion).

The Chernobyl Shelter Fund was set up in 1997 with the EBRD as administrator and to date has received contributions from 43 donor governments. The EBRD has also provided €325 million ($408 million) from its own resources in support of the work in Chernobyl to date.

The EBRD board of governors is the bank's highest decision-making body representing the EBRD's 66 shareholders. A two-thirds majority in shares and governors is required for the approval of the additional contribution to the Chernobyl New Safe Confinement. A decision is expected within the next 30 days, the bank said.

International donors have committed €11 million ($13.9 million) to a new fund established and managed by the EBRD that will support Ukraine's efforts to reform its economy, improve its business climate and return to a path of sustainable growth.

The bank announced in a separate statement yesterday that it had established a multi-donor fund to support reforms in Ukraine. Grants to the EBRD-Ukraine Stabilization and Sustainable Growth Multi-Donor Account (MDA) were made available by Finland, France, Germany, Netherlands, Sweden, Switzerland, UK and the USA. Denmark, Japan and Norway are also among countries considering contributing to the fund.

"The creation of the account is a rapid response to Ukraine's immediate economic requirements. The funds will help paving the way for a planned increase in EBRD investments in the country and to provide effective support to the authorities for policy reforms that are urgently needed to stabilize the economy," it said.

The EBRD is on track to deliver around €1 billion ($1.26 billion) of new investments in Ukraine this year alone. It is the leading investor in Ukraine with €9.5 billion ($11.9 billion) invested to date.